REPO auctions one day a week: BB

The REPO auctions, through which commercial banks borrow funds from the Bangladesh Bank (BB), will now be held one day, instead of two working days a week, starting November 1, 2024.

“Banks will be able to borrow through repo lending from the central bank only on Tuesday of every week,” according to a BB circular issued Monday.

If a holiday falls on Tuesday, repo lending will take place on the next working day, it also said.

Moreover, banks will be able to take overnight repos on the day of the Reserve Maintenance Period (RMP) for the convenience of maintaining the Cash Reserve Ratio (CRR) of the banks, it said.

Banks use repurchase agreements (repo) for short-term borrowing from the central bank. The open-market operations involve the central bank buying and selling government securities to regulate money supply and credit conditions.

However, the Standing Lending Facility and the Standing Deposit Facility will continue at prevailing rates daily, it added.